Fortunately, since tradable sectors (mostly, not always) need to compete at international levels, much of their product does not cater to any single idea of equilibrium. Non tradable sectors need to take a page from tradable sectors. Until they do, family formation and its associated housing are likely to remain weak. Even prosperous areas which are normally thought of as "open to all comers", may seek to restrict apartment building due to overcrowded schools which are already in high demand.

Also, from the initial link: "...subsidies to production are miscalculated if the representative agent approach is used...Thus to infer society's preferences from those of the representative individual, and to use these to make policy choices, is illegitimate."

Even though the concept of GDP as a war invention is a bit disheartening, the measure nonetheless contributed to "government building" on these terms. We've come a long way from GDP for war, to GDP for happiness. Just the same, readers know I will ask: wouldn't accurate monetary and economic representation for all, be a lot more fruitful? http://www.theglobalist.com/warfare-and-the-invention-of-gdp/

Emily Washington at Market Urbanism notes the systemic bias against small scale development. My hope is that local corporations can eventually provide means for the small scale development, which prosperous regions do not feel they need.

Dani Rodrik notes some of the problems that nations have experienced with structural reform.